2. Consumer duty & Financial crime Test - 2026

Risk and Compliance Re-validation test for all Advisers.

Consumer Duty & Financial Crime

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* 1. Adviser Name

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* 2. Your email address

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* 3. ATTESTATION. Before completing this test, please confirm that you have watched the learning material for the following subjects:

Consumer Duty

Financial Crime Prevention

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* 4. FINANCIAL CRIME. If you have a 'gut feeling' that a client's second job may not be legitimate, but have no definitive proof. What is the correct course of action?

Discuss your concerns with the Money Laundering Reporting Officer (MLRO)

Submit the application to avoid tipping-off the client

Ignore the feeling, as a SAR cannot be filed without concrete evidence of wrongdoing

Decline the case immediately and inform the client they are suspected of fraud

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* 5. FINANCIAL CRIME. What is the maximum penalty for the offence of 'Tipping Off' under the Proceeds of Crime Act?

Up to 6 months imprisonment

Up to 14 years imprisonment

Up to 5 years imprisonment

A significant financial penalty but no imprisonment

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* 6. FINANCIAL CRIME. In the three stages of money laundering, what does 'Layering' involve?

Concealing the source of the funds through a series of complex transactions and bookkeeping tricks

Introducing illegally gained money into a bank account

Using the laundered money to purchase a house

Setting up a cash-intensive front business like a car wash to justify income

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* 7. FINANCIAL CRIME. If you are aware that an applicant has been declined by a previous lender, what should you do?

Advise the client not to mention the decline on the new application to improve their chances

Refuse to work with the client as a previous decline is a definitive sign of fraud

Inform the new lender of the previous decline to maintain transparency

Only inform the lender if you know the reason for the previous decline to be explicitly fraud-related

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* 8. FINANCIAL CRIME. Which of the following is highlighted as a particularly useful tool for an adviser to request when trying to weed out fabricated employment?

The client's Linked In profile and employment history

A download of income and tax records from the client's HMRC Gateway portal

A signed letter from the client's line manager

A Google search for average salaries of the client's profession

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* 9. FINANCIAL CRIME. What is our policy regarding gifts or hospitality received from clients?

You can use your personal judgment and only report gifts that feel 'too lavish'

All gifts and hospitality must be reported for recording, and cash must never be accepted

All gifts, including cash, are acceptable as long as they are recorded in the hospitality log

Only gifts worth over £50 need to be reported to the MLRO

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* 10. CONSUMER DUTY. What is the maximum fee an adviser can charge for a standard mortgage, to a retail customer?

There is no cap as long as the fee is documented

£500, but it can be increased for complex cases

£1,499

£999

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* 11. CONSUMER DUTY. What is described as the industry's 'number one foreseeable harm' in the context of protection?

Placing single life policies into trust incorrectly

Not recommending a suitable protection solution or having a meaningful discussion about it

Recommending level life cover for a repayment mortgage

Splitting the amount of cover needed between both clients

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* 12. CONSUMER DUTY. What is the primary purpose of the 'Consumer Understanding' outcome?

To ensure the cost of services is fair and that fees are capped

To ensure Advisers are available for clients in the future for annual reviews

To ensure mortgage and insurance products are distributed to the correct target markets

To ensure Advisers explain things clearly so clients fully understand a product's key risks and benefits

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* 13. CONSUMER DUTY. When an Adviser helps a client consolidate a 3-year loan into their 20-year mortgage, how is the 'foreseeable harm' of increased total cost mitigated?

By charging a reduced fee to compensate for the additional risk to the client

By documenting the client's reasoning, explaining the risks and costs, and proceeding only if the client still agrees

By refusing to proceed because it is never in the client's best interest

By setting an automatic review in 3 years to assess the client's financial situation again

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* 14. CONSUMER DUTY. Which ONE of the following was NOT mentioned as possible foreseeable harm when advising on mortgages?

Not reviewing a maturing fixed rate

Arranging a purchase mortgage without recommending a homebuyers report

Selecting the wrong mortgage product

Recommending a Re-mortgage over a Product Transfer

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* 15. CONSUMER DUTY. Which of the following best describes the 'Consumer Support' outcome?

Helping clients meet objectives, being there for them in the future, and adapting processes for vulnerable clients

Making sure the fees charged for a service represent fair value

Confirming in writing that a client has chosen not to take out protection

Ensuring all marketing materials are clear and easy to understand